Peterson v McCrohon

Family History 7The deceased was born in March 1939. In 1971 he commenced a relationship with Robyn May Grisdale. Robyn at that stage had two young children, one of whom was the plaintiff who was born in September 1966. In either 1971 or 1972 the deceased and Robyn began living in a de facto relationship. In 1974 they moved from Canley Vale to Cabramatta and they married in October 1975. 8They purchased a property in 1976 at Canley Vale and lived together there until they separated in 1985. The Canley Vale property was sold in 1986. 9In March 1990 the plaintiff married her first husband, Robert Baranic and at the end of that year they moved to Malaysia so that he could take up employment in that country. In 1991 they returned to Australia and lived at Northmead in Sydney. They separated in 1996. 10In May 1997 the plaintiff commenced a relationship with her present husband, Paul Petersen. They had a son, Andrew, in June 1999 and they married on 29 January 2000. Their second son, Matthew, was born in August 2003. The plaintiff had worked as showroom assistant for Wideline and in 2005 she lost her job. At this stage the deceased lent the plaintiff $17,000 to consolidate her debts, he himself borrowing the sum on the security of his home. 11At the beginning of 2005 the deceased had met Zhi Fang Zhao known as Jan. They married in that year and entered into some prenuptial agreements. 12As I have mentioned in 2006 the deceased made the will in favour of Jan and in case she predeceased him, leaving all of his estate to the plaintiff. 13In 2006 the deceased had a stroke and was admitted to hospital for some time. In 2007 the deceased purchased a house at Canley Heights from his mother's estate pursuant to a deed between himself and his two brothers. Effectively the deceased had to pay out his two brothers for their share of the house. His brother Kevin received the full amount of his share ($120,000) and his other brother John only received part of his share ($90,000). 14On 23 September 2010 the deceased was admitted to hospital. On 29 October 2010 the solicitor for the defendant received instructions for a new will from the deceased and the execution of an enduring guardian and power of attorney. As I have mentioned, the last will was executed on 1 November 2010 in favour of the deceased's step aunt, the defendant. The deceased died on 12 January 2011. There were then various steps taken in respect of caveats against the grant of probate and in due course the summons was filed on 28 December 2011, which was within time. 15Probate in common form was granted on 12 April 2012.

Eligibility 16There is no dispute that the plaintiff was part of the household of which the deceased was a member. The plaintiff is an eligible person. Given that the plaintiff had lived with the deceased during her childhood until her mother and the deceased separated in 1985 when the plaintiff was 19 years of age she was dependent upon him for accommodation. 17The plaintiff also kept in touch and had a long association with the deceased after this period although there is a dispute about the extent of her contact over the last five years of the deceased's life. Notwithstanding this, plainly on the traditional basis there would be factors warranting making the application and I will see whether it has prospects of success. 18In applications under the Family Provision Act 1982 the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 has set out the two-stage approach that a court must take. These comments were equally applicable to claims under the Succession Act. At page 209 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." 19However, as a result of Andrew v Andrew [2012] NSWCA 308 the situation is, somewhat different. In that case, Barrett JA said that the two stage approach adapted under the Family Provision Act still applied to claims under the Succession Act. Basten JA held that a two stage approach was not necessary. The President thought it was an analytical question of little consequence. In the circumstances of this uncertainty, I will consider it on both bases.

The plaintiff's situation in life 20The plaintiff is 44 years of age, married with two children aged 8 and 12 years. The plaintiff attended school to year 10 and has been in continuous employment since she left school in 1981 until two years ago. Both she and her husband are now in receipt of Centrelink income of approximately $1,200 per fortnight. Her husband also has some casual work at Harvey Norman working several days a week. Their income is consumed in their expenses of $1,878 including a claimed rent of $660 per fortnight. It seems that actual rent which they now pay is $250 per fortnight. The plaintiff and her husband have only modest assets worth about $3,000 and the plaintiff owes her mother some $20,000. Her husband has liabilities of $8,100. Their superannuation totals $10,000.

Situation and life of the defendant 21The defendant is 75 years of age, single, with no dependants. She owns her home in Fairfield West unencumbered and lives on an aged pension of $700 per fortnight. She has sums on term deposits in the order of $67,000 and a car worth $3,000. She also 1,000 Telstra shares and 924 IAG shares. Naturally of course she has her interest in the estate of the deceased. 22Because of her relationship and the location of houses, she had a close relationship with the deceased's mother and knew the deceased as a child and in his adult life. She did not see much of him after his marriage to the plaintiff's mother. 23After 1988, when the deceased came back to live with his mother after separation from the plaintiff's mother, the defendant would see him. She was aware of the deceased's unfortunate marriage to Jan in 2005. I say unfortunate because apparently they did not live together and Jan did not even tell her parents that he had married her. There is also evidence that the deceased, being the generous man that he was, gave $160,000 to Jan for the purchase of a unit. It is plain the deceased loved Jan but there did not seem to be any reciprocation. 24After the deceased's mother died in 2005, the defendant used to still keep in contact because she was aware that the deceased was lonely in his later life. She arranged for him to have "Meals on Wheels". She would visit him.

The plaintiff's relationship with the deceased 25I note that the plaintiff did not contribute to the estate of the deceased. 26One matter of contention in the case is whether or not the loan of $17,000, or sometimes said to be $19,000, has been repaid by the plaintiff to the deceased. A personal loan of $17,000 was taken out by the deceased in August 2005 and regular loan repayments were deducted from his bank account, the final payment being in August 2010. 27The plaintiff gave evidence that she repaid between $14,000 - $15,000 of the loan. Some of these repayments are in evidence as they were made by transfers out of her wages to the deceased. Sometimes, however, payments were made in cash and on occasions the deceased according to the plaintiff would say to her "don't worry about it, keep it for yourself" when she offered cash payments. 28The matter is important because the deceased appears to have become fixated in his later years upon what he alleged was the plaintiff's failure to repay the loan. At that stage he had a small mortgage which included the amount he had borrowed for the plaintiff which he had to repay out of his only income, the pension. 29The defendant submitted that the plaintiff's failure to repay the loan had a significant effect on the deceased's relationship with the plaintiff as the deceased had expressed a wish to the defendant that he wanted nothing further to do with the plaintiff. 30The deceased's brother reported that the deceased had told him that the plaintiff and her sisters had not repaid any of the money lent to them. Given the bank account evidence this was plainly wrong in respect of the plaintiff. It seems likely to me that the deceased became frustrated with this matter. I am prepared to accept that the plaintiff repaid the amounts that she claimed, namely, between $14,000 and $15,000. 31The question of estrangement has been dealt with in many cases. In Foley v Ellis [2008] NSWCA 288 the Court of Appeal referred to this kind of problem in these terms: "101. The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of that testator or testatrix to provide for the claimant. In Palmer v Dolman, Ipp JA, after a review of the cases, observed (at [110] that: '... The mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act.' See also Wheatley v Wheatley [2006] NSWCA 262 at [22] - [23] per Bryson JA (with whom Santow and McColl JJA agreed), addressing the second stage of the process required by Singer v Berghouse. 102. The authorities indicated that where the claimant has been estranged from the testator or testatrix, the application of section 7 of the Family Provision Act requires that the estrangement be appraised and its causes considered: Wentworth v Wentworth, estate of G M Wentworth (Bryson) quoted in Wheatley v Wheatley at [22]. In addition, section 9 (3) (b) expressly requires the character and conduct of the eligible person to be taken into account at the second stage of the process. Care should be taken, however, not to over simplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context of raw emotions experienced at the time. The 'wise and just' testator or testatrix (Bosch v Perpetual Trustee Co Ltd [1938[ AC 463 AT 478-479 per Lord Romer) must be taken to understand this." 32In Wheatley v Wheatley [2006] NSWCA 262 Bryson J had the following to say: "37. The poor state of the relationship between Mr Wheatley and the testatrix, illustrated by the absence of visits during the last 13 years of her life, operates to restrain amplitude in the provision to be ordered. However, Mr Wheatley is an eligible person, the testatrix's only son and one of only two children, and his needs are severe and go far beyond the needs for renovation of his flat and dental treatment which the Trial Judge's order provided for. Amplitude would not be appropriate in ordering provision for him, but it must be observed that provision for him, even the full amount nominated by his counsel, would not produce any hardship for Ms Wheatley, who would still be provided for on a scale according full and appropriate recognition to her claims." 33The matter was further discussed recently by White J in Kay v Archbold [2008] NSWSC 254 in these terms: "94. Senior counsel for the defendant submitted by reference to observations of Bryson JA (with whom Santow and McColl JJA agreed) in Wheatley v Wheatley [2006] NSWCA 262 at [37] that the poor state of the relationship between the deceased and the plaintiff, illustrated by their lack of communication between 1999 and 2006, even when the plaintiff was aware that her mother was ill and seriously so, operated to 'restrain amplitude in the provision to be ordered'. 95. Their estrangement is certainly a factor to be taken into account in determining what provision should be ordered. However, cases are infinitely various. There is no rule that irrespective of a claimant's need, the size of the estate, and the existence or absence of other claims on the estate, a claimant is not entitled to 'ample' provision if he or she has been estranged from the testator. Bryson JA was making observations appropriate to the facts in Wheatley v Wheatley. He was not espousing any general principle as to the relevance of amplitude. The very general directions in sections 7 and 9 of the Family Provision Act require close attention to the facts of individual cases. It is an error to seek to extract statements of general principle from observations directed to the facts of specific case. 96. The present is not a case of 'bare paternity' or 'bare maternity'. But even in such cases, the fact of parenthood is highly material to the existence of a duty to make provision. In this case some provision was made. The question is as to its adequacy." 34I pause to note that in this case there is no parenthood in law but, given the upbringing extended to the plaintiff in her childhood years, there is little difference in this case. 35The plaintiff conceded in cross-examination that she did not see the deceased in the year before he died. She did give evidence of having visited him in hospital when he had a stroke in 2006. I am prepared to accept that evidence. Although she did not see him in the last year before he died she gave some evidence (which was corroborated by her mother) that she had made attempts to contact him during the year. 36There was not a lot of contact after 2006 in part because of the responsibilities which the plaintiff had with her young children. 37In my view this falling off in contact is not such that I should deny her provision or make any serious reduction in the amount of her provision. Given the small size of the estate any provision for her will have to be modest.

Discussion 38The plaintiff submits that the defendant has put forward no evidence of any need that would not be met by the defendant receiving the balance of the estate once the legal costs of the parties and such provision as the Court might be minded to grant the plaintiff are deducted from the estate. 39The plaintiff submits that proper provision for her would be a significant proportion, more than 50%, of the balance of the net distributable assets. Such an award would allow the plaintiff to pay her and her husband's various debts, assist them in the education of their young children who have many years of schooling ahead of them, and would also enable the plaintiff to have a deposit for purchasing a home of her own and a fund to provide for future contingencies. 40The evidence given by the plaintiff as to her needs is as follows: (a) Her furniture and white goods are old and need replacing at a cost of $25,000. (b) The family car is 19 years old and needs to be replaced. A new Falcon would cost $37,235. (c) The plaintiff and her children have dental needs which will cost $6,012. The children will need braces at a cost of between $9,000 and $16,000. (d) The plaintiff suggests that she needs a sum of $90,000 for contingencies. (e) The plaintiff suggests that she would like to have funds to put a deposit on a home. She has an approval for a loan of $360,000 on a $410,000 house which she would wish to buy on the Central Coast. 41These amounts total at least $211,235 and, having regard to the size of the estate, this is why her claim is only for 50% of the balance of the net distributable estate. 42The first three claims are appropriate ones and it is doubtful whether it would be possible for the plaintiff to afford the high level of indebtedness for home ownership. Some back stop particularly when raising teenagers would be appropriate. 43The defendant submits that she would like to give $30,000 from the estate to John Wilson, who was the brother of the deceased and a step nephew of the defendant. 44Apart from suggesting she wants to be magnanimous and pay a debt to the deceased's brother which the deceased could not manage in his lifetime, the defendant has not drawn attention to any urgent necessities which she faces. She did extend her friendship to the deceased particularly in the last five years of his life. 45In my view an appropriate legacy for the plaintiff is $100,000.

Orders

1. I order that the plaintiff receive a legacy of $100,000 out of the estate of the deceased.
2. Subject to any submissions to the contrary in the next two days, the plaintiff's costs on the ordinary basis and the defendant's costs on an indemnity basis shall be paid out of the estate of the deceased.
3. Interest to run on the legacy at the rate provided for in the Probate and Administration Act 1898 within one month of today's date.
4. Subject to the solicitors retaining the exhibits for the appeal period, the exhibits may be returned.
5. Liberty to apply.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 February 2013